Oil & Gas

HS2 calculations missed out impact on oil and gas industry, admit experts

hs2

Experts who claimed the HS2 railway project would damage the north-east economy have now admitted that a “question mark” hangs over their calculations because they failed to factor in oil and gas.

A new formula which will take into account the multibillion-pound North Sea industry is on the “to do” list of senior executives from financial services giant KPMG, they said yesterday in evidence to MPs.

UK Government ministers said in September that a KPMG report had concluded that the proposed new high speed rail line would boost the British economy by £15billion a year.

However, while the report listed the areas that would benefit – such as Greater London by £2.8billion, and the West Midlands by £1.5billion – it omitted the details of 50 areas that it found would end up worse off.

The data was released last month following a freedom of information request and showed that Aberdeen, Aberdeenshire and Moray would lose out by more than £220million a year under the scheme, which would involve super-fast trains running from London to Birmingham by 2026, and later spurs connecting to Manchester and Leeds.

Senior KPMG figures gave evidence on the report to the Treasury select committee at Westminster yesterday.

SNP MP Stewart Hosie asked about the figures for the north-east. He said: “For Aberdeen to lose out in the way the whole business case implied would require trade from Aberdeen, serving the North Sea for example, with a fixed base, be served by somebody in Birmingham because they had a rail line to London.

“That doesn’t really seem to add up to me.”

Lewis Atter, a partner at KPMG, replied: “That’s of course the Scottish economy today. This is asking questions about the UK economy in 2037. It’s a different place. But we acknowledge that one of the things on our, if you like, to-do list, is the international dimension to this.

“And one of the things that is very clearly unique about Aberdeen is North Sea oil, that’s a kind of ‘national, external’, and it’s on our, as we identified earlier, to-do list, in terms of further work to be done.”

Mr Hosie suggested to Mr Atter that he was “not dreadfully convinced”.

He replied: “In terms of places where there is a significant international dimension, there would be a question mark.”

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